A pig with lipstick is still a tax
This is the Perspective from today's edition of Europe Airline Daily - the comprehensive new pre-digested daily update on strategic news from Europe, saving you time and keeping you right up to date. Complimentary subscriptions to this report are currently available. Register now!
As Europe’s political leaders invest heavily in “spin”– and there is no more expert exponent than the UK government - the airline industry again bears the brunt. This week, the latest piece of admin-gobbledegook emerged from Westminster: “Administrative Incentive Pricing”.
This new tax on radio spectrum used for air traffic management and airline communications will raise GBP60 million a year for the UK Treasury. Admittedly that pales into insignificance against the GBP1 billion each year that is being diverted from potentially useful measures to attack climate change with the 2007 “Air Passenger Duty” – allegedly to help fight climate change, but really just a fudge to grab more revenue.
Goethe, Victor Hugo, and William Shakespeare between them could not have risen to such great feats of verbal sculpture - although, with respect, Kafka, Huxley and Machiavelli might have had a decent attempt. This move is simply an abuse of the UK government’s monopoly position (in allocating spectrum) allowing it indiscriminately to grab more money wherever it can.
Nor does it do much for British competitiveness. As AEA Secretary General, Ulrich Schulte-Strathaus, observed yesterday, “this levy will make aviation even more costly in the United Kingdom, thereby reducing even further the competitiveness of UK based airlines and British airports”.
If only a fraction of the ingenuity invested in political spin were instead turned to reducing the chaos of Europe’s airways. Accelerating the introduction of Europe’s Single Skies is now no longer just a financial imperative. The current complexity directly dumps millions of tonnes of unnecessary additional carbon emissions into the atmosphere every year.
It is in the power of governments alone to rectify this constraint. But, because they are not accountable, they are able to blame the sin of air travel (to use the words of a British Bishop a couple of years ago) on the airlines. That may not be a concern for governments – as many airlines are privately owned and therefore soft targets for taxes. But this industry has become a foundation of social and economic development. Chipping away at the foundation, with a little bit here, a little bit there, bears chilling similarities to the negligent attitudes that have allowed us to reach such a stage in the world’s climate system.
Progress is certainly being made to rationalise Europe’s airways system. But it is painfully slow and ad hoc. Why should governments too not be accountable? The European governments which are so quick to impose taxes on the airline industry are themselves the cause of the single greatest unnecessary cause of airline emissions – circuitous routings and undercapitalised monopoly infrastructure. More often than not, the only purpose is to raise even more “taxes”, through their government-run air navigation services providers.
Making governments directly accountable - and subject to carbon caps and ETS rules – could only be a positive step, where the motive and function of the unnecessary restrictions on commercial activity is purely to raise revenues. At least that might provoke a little more substance beneath the lipstick.